What are the different types of demand response programs?

What are the different types of demand response programs?

Demand response programs can be categorized into two main types: incentive-based and price-based programs. Incentive-based programs offer financial rewards for reducing energy use during peak times, while price-based programs adjust electricity prices based on demand.

Can you explain how incentive-based programs work?

Sure! In incentive-based programs, participants receive payments or credits for reducing their energy consumption during peak demand periods. Utilities typically notify participants in advance, and the amount they earn depends on how much energy they save.

What are some examples of these programs?

Examples include the Demand Bidding Program, where businesses bid to reduce energy use, and the Capacity Market, where participants are paid to be available to reduce load when needed.

How do price-based programs differ from incentive-based ones?

Price-based programs adjust the cost of electricity based on demand. For instance, during peak hours, prices may rise, encouraging consumers to reduce usage. Unlike incentive-based programs, participants aren't paid directly but save money by shifting their usage.